Not Feeling Lucky

Why Europe's Antitrust Charges Against Google Won't Stick

About the Author:

My FA Anthologies

BERIN SZOKA is President of TechFreedom. GEOFFREY A. MANNE is Lecturer in Law at Lewis & Clark Law School, Executive Director of the International Center for Law and Economics, and a TechFreedom Senior Adjunct Fellow. He was Director of Academic Outreach for Microsoft from 2006 to 2009. Both TechFreedom and the International Center for Law & Economics have received support for their policy work from Google and Microsoft.

Regulators around the world have grown increasingly uncomfortable with the way business is being done on the Internet. From Brussels to Buenos Aires, they are most frustrated with Google, far and away the most popular search engine and advertising platform. As the company has evolved, expanding outward from its core search engine product, it has come to challenge a range of other firms and threaten their business models. This creative destruction has, in turn, caused antitrust regulators -- usually prodded by Google’s threatened competitors -- to investigate its conduct, essentially questioning whether Google’s very success obligates it to treat competitors neutrally.

This controversy runs deeper than a short-term economic conflict between companies or even countries. At base lies a conflict of visions of Internet governance. The European approach was summed up by the former French President Nicolas Sarkozy’s declaration at last year's G8 summit that “the Internet is the new frontier, a territory to conquer. But it cannot be a Wild West. It cannot be a lawless place.”

Such concerns are not unique to Europe. In April, the U.S. Federal Trade Commission hired Beth Wilkinson, a prominent trial lawyer, to help it build an antitrust case against Google. The FTC seems most troubled by allegations that the company prioritizes its own content and specialized results, such as reviews and maps, over those of competitors. This move suggested that the agency may soon sue. Then, in May, antitrust authorities in India and Argentina opened investigations based on similar claims. Each new inquiry adds to the clamor from competitors to do something about Google.

On May 21, the European Commission announced the “preliminary conclusions” of its own investigation. The EC offered little explanation of its complaints but gave Google until early July to propose remedies to four concerns: that the company gives preference to its own specialized search results over those of other companies; that it displays other companies’ information, such